Whether it is actively utilized or not, every business has a wealth of data available to them. Leveraging this data allows a business to make fully informed business decisions which will lead to commercial growth, increased bottom line and improved customer relations.
What is Data Driven Decision Making?
Data driven decision making is a term used to describe the process by which companies collect data, which is then analyzed and used to inform decisions that align with business goals, incentives and objectives. The insights gained from this process can be used by anyone, whether they are a sales manager, a product developer or work in human resources.
The term ‘data driven decision making’ sounds to many like a restrictive endeavor, since it might imply that decisions must stem from data generated sources. However, this need not be the case at all. Companies that have data decision making as the norm have, in turn, a culture that encourages critical thinking, factual basing, and curiosity. You are able to follow your entrepreneurial spirit as long as the decisions you are making have, at some point, been backed up by the data. Essentially, data driven decision making, removes costly personal biases, as it enables you to prove that the choice being made is the best one for the business.
When trying to extract genuine value from data, something necessary to actually benefit the decision making, many companies choose to use digitization technology. Using truQC technology for data collection, analysis and insights, ensure that you are not working under false pretences, as well as reducing the overheads needed for a dedicated in-house team.
What is the Value of Data Decision Making?
MIT professors Andrew McAfee and Erik Brynjolfsson conducted a study which illustrates the power of data on short-term performance. The study showed that, of the businesses surveyed, those that were primarily data driven experienced, on average, 4% higher productivity, with 6% higher profits. However, the impact of data decision making has been also found to bring about unique long-term benefits, too. Companies that utilize data for decision making are able to:
- Create new business opportunities
- Sustain high revenues
- Predict trends
- Optimize operations
- Continue to produce actionable insights
How to Implement Data Decision Making
In order to make the most out of the data analytics available, it is first necessary to consider your business goals. Beginning by prioritizing objectives means that you are able to more accurately use data to your advantage since what is collected will only be composed of the most relevant information.
The next step involves partnering with a company who can help you find and represent this relevant data. Once this has been completed, it is time to look at the patterns and trends that have been identified to draw conclusions. The next step is to plan a strategy as to how to reach your goal and by when. Finally, you can compare the historical data with the data from your most recent goal to inform further decision making.
Embracing data driven decision making can have a transformational effect on almost every area of your business. By enabling faster and more informed decision making, using data can help a business grow, generate more profits, and increase efficiency.